2023 Tax Planning: What to keep in mind for your company’s fiscal year plans

By Glória Cunha

Tax management plays an important role in business profitability and competitiveness. For this very reason, companies wishing to optimize their tax performance in the coming year should already be working on their tax planning for 2023.

Every year, companies should take the time to reassess the key factors affecting the current year's results, while preparing their budget and setting their goals for the following year.

Indeed, defining the actions and strategies for upcoming projects will certainly contribute to a more efficient tax management in 2023.

What to consider in your 2023 tax planning?

To start this assessment, one should have a deep understanding of the business maturity of the company's operations, identifying changes to its economic environment, billing, profit margin, expenditures, and operational structure.

Once the operational scenario for the coming year has been forecast, a tax review is carried out, taking into account all tax breaks that fit the company's operations.

Defining a tax regime

A dedicated tax team is able to run simulations and assess the pros and cons of adjusting to a new tax treatment.

Depending on its business segment and turnover rates, a company may not be able to opt for a tax regime at all.

Taxable Income, for instance, is the only tax regime applicable to legal entities operating in the financial sector, to those obtaining yield and capital gains from investments abroad as well as to tax-advantaged companies enjoying tax reliefs or exemptions.

The complexity of calculating taxes under each regime is an important aspect to bear in mind when performing this assessment. Taxable Income holds plenty of tax opportunities, but requires constant follow-up in the company’s routine.

In 2023, companies opting for the Simplified Taxation System should make their requests by the last working day of January. Requests for the Deemed Profit or Taxable Income systems should be made by the payment date indicated on the slip pertaining to the first installment of the income tax and social contribution due for the year.

Tax recovery

Another way of contributing to the business’s efficiency is to recover credits stemming from double or overpayment of taxes.

A tax review helps to identify opportunities for redeeming credits that can be used later to pay other taxes due or to restore those funds back to the company’s cash flow.

Read more: Tax offsets and refunds: from tax review to PER/DCOMP

Tax efficiency for 2023

The team of experts at Domingues e Pinho Contadores assists companies in their annual tax planning and tax credit recovery, guiding them through the best practices that will result in a competitive edge. You can rely on this support: dpc@dpc.com.br.